On July 9, 2004, the Union of Needletrades, Industrial, and Textile Employees (UNITE) merged with the Hotel Employees and Restaurant Employees (HERE) to form the politically progressive UNITE HERE! (UH). The new union grew out of a successful 2003 campaign against Yale University, in which UNITE had given financial assistance and manpower to HERE. Bruce Raynor, the President of UNITE from 2001-2004, was elected General President of UH, and John W. Wilhelm, President of HERE from 1998-2004, was also elected President but without ultimate authority. Wilhelm eventually assumed Raynor’s position when he was elected President of UH on June 30, 2009, at the union’s first constitutional convention.

UH’s history has been plagued by political infighting, bitter division, scandal, and corruption. In 2005, UH challenged John Sweeney’s leadership and withdrew from the AFL-CIO union federation to join the Andrew Stern-founded and Anna Burger-run Change to Win (CTW) coalition. Just four years later, in March of 2009, UH’s board voted to split with CTW and to rejoin the AFL-CIO. UH accused the SEIU, one of the member unions of CTW, of interfering with its membership.

The split, however, underscored a division within UH itself. Bruce Raynor and John Wilhelm sued one another and vied for control of key financial resources, particularly the Amalgamated Bank, with its $4 billion of assets and prime Manhattan real estate which UNITE had originally brought to the merger. The internal battle also threw the local union chapters of UH into confusion and violent confrontation. In early 2009, Raynor broke away from UH with 150,000 members to form a new SEIU-aligned union called Workers United, although the dispute between the two sides was expected to continue for years to come.

Prior to the merger, HERE had been beset by legal problems and charges of corruption for decades. In 1986, the President's Commission on Organized Crime stated that criminal infiltration of HERE had been going on for dozens of years. In 1995 the commission filed corruption charges and installed a federal monitor to oversee the union. Even when federal oversight ended in 2001, a National Institute for Labor Relations Research report alleged continuing corruption:

In January 2001 New Jersey State Police announced they had charged five people with embezzling at least $71,000 from the union severance fund.

In March 2002 a local union President in northern New Jersey was discovered to have paid $542,000 in severance to a former union official following the latter's expulsion from the union for associating with mobsters.

In August 2003 a New York City union official was charged with stealing $170,000 from the local union, money he used to persuade a female clerk from going public with the fact that the official had used union funds to pay for his own sexual trysts with prostitutes.

There is also evidence to suggest that UH President John Wilhelm once rigged an election at the union’s Local 1 in Chicago.

In 2003 and 2004, UNITE likewise engaged in illegal activity and was eventually found guilty of unlawfully accessing confidential personal information. In 2006, U.S. District Judge Stewart Dalzel ordered the union, now a part of UH, to pay compensation to the employees of the Cintas Corporation.

Charges of corruption and shady union practices would continue after the merger in 2004. In July 2006, a jury in North California found that UH had libeled the Sutter Health hospital chain and was guilty of having acted with “fraud, malice, and oppression.” Later that month, UH was ordered to pay $17.3 million in compensatory damages for that conviction, money which would come directly from union member dues.

UH has also drawn criticism for its use of "card-check," the Employee Free Choice Act's controversial provision to ban secret union ballots. When Raynor was president of UH he stated unequivocally that “there’s no reason to subject the workers to an election.” UH has used the card-check policy as a weapon with which to bully companies into becoming unionized. According to Raynor, these tactics are highly successful because employers “think we are out of our minds and the result is we win … because we’re willing to do what’s necessary. We’re not businessmen, and at the end of the day, they are. If we’re willing to cost them enough, they’ll give in.”

According to a number of UH members, their union officials have pressed them to reveal highly personal information (about such tragedies as their past encounters with sexual abuse or alcoholism), and have subsequently forced them to recount these tales repeatedly to workers whom UH was trying to unionize; the UH officials believed that such stories would make an emotional impact on potential recruits and thus would make them more likely to join the union. This particular practice is commonly known as "pink-sheeting," after the color of the paper on which the private details are recorded.

UH has given millions of dollars in “hard” and “soft” money contributions to political candidates; the vast majority of these funds have gone to Democrats. In 2008 UH supported Barack Obama during the Democratic presidential primaries, runningattack ads against Hillary Clinton that injected racial politics into the election.

UH is also a part of the pro-amnesty lobby on immigration reform and helped to organize major "immigrant-rights" rallies in 2006 and 2010.